Global Economics

Making Soccer Sexy: The Beckhams Hit L.A.

David Beckham's $250 million dollar contract is meant to send a message to the American public: Soccer has finally hit the big time

David Beckham's move to the American professional soccer league is probably the most spectacular transfer of all time. The $250 million deal is about more than just a player switching leagues -- it's about bringing together football and showbiz and finally making soccer sexy in the US.

The day after he helped Real Madrid win the Spanish championship, David Beckham put in a call to Frank Yallop. It was the first extended conversation between the European soccer star and the Los Angeles Galaxy coach.

Yallop, 43, spent 14 years as a player with Ipswich Town, an English professional club known affectionately as the "Tractor Boys." He was the sort of diligent professional for whom football is more work than play. The contrast between his own past as a player and Beckham's persona -- complete with his various hairstyles and his constant appearances in the celebrity pages of the tabloids -- was clearly on Yallop's mind.

But as soon as the two men began discussing the daily workflow, Beckham's vacation training program and Yallop's plan to have him play more in the center of the pitch so that he can have more contact with the ball, it was obvious that they would get along. "There was no talk about Hollywood," says Yallop.

This Friday, Yallop will meet his new star in person for the first time. It's the day Beckham will debut as a new player in Los Angeles and, if everything goes to plan, it'll be the day American soccer is reinvented.

It was nine months ago that Galaxy's management asked Yallop whether a player like David Beckham could help the team on the field. Yallop smiled. Few teams on the planet wouldn't benefit from having someone like Beckham in their ranks. His response was apparently good enough for the club's executives, who promptly went to work and produced a five-year, $250 million contract. "It's an extremely innovative deal," says Simon Fuller, Beckham's manager.

$250 million over five years comes to about a million dollars a week. More than just a salary, these numbers sent a clear message to the American public: That soccer has finally hit the big time, and that this David Beckham makes more than some baseball or football stars. In fact, his annual salary as a player will amount to only $6.5 million, with the rest apparently coming from advertising and merchandizing contracts. His switch to Major League Soccer (MLS) is the most remarkable in football history, not so much because of the numbers involved but because it represents the first merger of football and the entertainment industry.

Still a Marginal Sport in the US

In Carson, the neighborhood where Galaxy has its headquarters, Los Angeles is about as glitzy as your average German industrial city. The Home Depot Center is a huge complex that includes a soccer stadium, a tennis stadium, an indoor cycling track and many well-manicured training fields. Yallop's team trains on field number six. Crosses here fly in from the left and right and go behind the goal. If they ever land in front of the goal, the strikers invariably kick them over the bar, missing the goal altogether. Yallop is a kindhearted man who always seems a bit worried. A look at his team explains why. Many of his players are poor kids, and that's exactly the way they play.

"David will be shocked when he finds out how little some of his fellow players make," says Cobi Jones, an American national team star who spent 11 years playing for Galaxy. Josh Tudela, the son of a Bolivian, grosses $2,500 a month as a professional in his first year. A midfield player, Tudela says he is looking foward to "Beckham showing us a few new tricks." Tudela isn't even the lowest-paid player on the team. Galaxy's third-choice goalie makes all of $1,100 a month. An MLS club's salary budget for a single season, about €2 million, is less than many regional clubs in Germany spend on their players.

The Anschutz Entertainment Group owns LA Galaxy and its home stadium. Anschutz also owns two other MLS teams in Houston and Chicago, down from six teams in the past. Company owner Philip F. Anschutz is known for being a man with a keen eye for a business opportunity. According to Forbes, the publicity-shy entrepreneur, who hasn't given an interview in years and who made his fortune in oil and railroads, is worth about $7.9 billion.

Anschutz has already shown that stadiums and sports teams can be very lucrative business ventures. The LA Lakers and the LA Kings play basketball and ice hockey at his Staples Center in Los Angeles. (He also happens to own the LA Kings.)

His investments have clearly paid off. In London he recently reopened the bankrupt Millennium Dome, renamed "The O2." He owns the Berlin Eisbären (Berlin Polar Bears), a professional ice hockey team that will be playing in his new arena at the city's Ostbahnhof train station beginning in the fall of 2008. Anschutz also runs concert tours, pop music festivals and travelling exhibitions, such as "Tutankhamen and The Golden Age of the Pharaohs." A conservative who campaigns against the teaching of evolution in schools and gay marriage, Anschutz has even successfully bankrolled Biblical film projects.

But to see American soccer as a successful venture takes more than just a keen eye for business -- it requires thinking outside the box. The MLS has never turned a profit in its 11-year history. It has achieved modest success -- games attract an average of about 15,000 fans and are broadcast on national television -- but professional soccer is still only a marginal sport in the United States. Nevertheless, last year Anschutz and other team owners became convinced that stars could provide the breakthrough the sport was looking for.

Part 2: Adding Spice and Glamour to US Soccer

The policy MLS team owners had pursued until then could best be described as tightfisted, based on the expectation that their league would gradually grow as more and more people played soccer in the United States. Salary caps were kept low to ensure that teams would not engage in bidding wars over stars, and players were and still are required to sign their contracts directly with the league. Until now the logic behind America's soccer socialism was that the game could only become a moneymaking proposition if all players were treated equally

But now all that has changed. Under a new policy unofficially dubbed the "Beckham rule," each team is now permitted to have two players earning annual salaries of over $400,000. But few teams have taken advantage of the new regulation. Apart from Beckham, Mexican player Cuauhtémoc Blanco, who plays for Anschutz's Chicago team, and the Columbian Juan Pablo Ángel with New York's Red Bulls are the only professionals in the MLS who earn more than €1 million a year. Both players were hired to appeal to Spanish-speaking fans. A few other American national players earn salaries in the upper six figures, but nothing comes even close to the Beckham deal.

Beckham's path to the entertainment capital has been eased by CAA Sports. The company was founded in early 2007 and is a subsidiary of the most powerful talent agency in Hollywood, Creative Artists Agency, which also counts Tom Cruise, a friend of Beckham's, among its clients. Beckham's manager is Simon Fuller, who made his fortune with "American Idol," created the Spice Girls in the mid-1990s and even doubled as a matchmaker when he introduced Beckham to his wife Victoria a.k.a. Posh Spice. Both are his clients today, and, to coincide with her husband's new gig with Galaxy, Victoria Beckham is about to take part in a Spice Girls comeback. The announcement that the group was getting back together was made at "The O2" in London, and the Staples Center in Los Angeles will be the first venue on the group's upcoming world tour -- both venues owned, of course, by Anschutz.

The strategy, clearly, is to have the Beckhams cross-promote each other in their respective careers. Victoria, the singer, is still more famous in the United States than David, the soccer player. Victoria is scheduled to appear on the Jay Leno Show the evening after her husband's Galaxy debut. Three days later, Leno's network, NBC, will air a program called "Victoria Beckham: Coming to America" -- a reality soap opera about the family's move to a $22 million California mansion once owned by the Sultan of Brunei and in a neighborhood home to celebrities like Tom Cruise, Larry King and Britney Spears.

Meanwhile, Anschutz needs Beckham to expand his franchise into Asia, with an LA Galaxy guest tour planned for the spring of 2008. Together with Beckham, the company operates soccer schools in London and Los Angeles, where young players from the Philippines and Japan are already enrolled in week-long courses. The David Beckham Academy will soon open a branch in Asia.

Alexi Lalas, LA Galaxy's general manager, was a US national player in the 1990s best known for his long, unkempt red hair and goatee beard. With Beckham he plans to transform the team into the first American global player in the soccer world, with enough clout to sell its TV broadcast rights and market its brand worldwide. "I dream of the day when kids around the world who wake up in the morning thinking about soccer in America, think about LA Galaxy," he says.

Recapturing the Cosmos Years

There has already been one American team that managed to do exactly that. In the late 1970s, soccer legends Pelé and Franz Beckenbauer played for Cosmos New York, making soccer sexy in America for a brief moment in time. The team belonged to entertainment conglomerate Warner Communications, whose owner, Steve Ross, was the team's biggest fan. Mick Jagger and Henry Kissinger attended games, and the players enjoyed reserved seats at the legendary nightclub Studio 54, a steady supply of groupies and plenty of sex on flights to away games. To this day Franz Beckenbauer says: "Going to New York was one of the best decisions of my life."

In those days every team wanted to emulate Cosmos New York. They outbid each other over washed-up stars, and soon the league plunged into bankruptcy. The last season was played in 1984. Cosmos New York's strategy was to win the race for the public's interest with a sprint while the MLS has instead opted for a long-distance race.

But the pace has been deadly slow so far. "The quality would be good if they took the players in the league and made six or seven teams," says coach Yallop. But there are currently 13 teams playing at what amounts to a second-division level at best. What is really lacking is all too apparent at the Home Depot Center, despite the fact that the 24,000-seat stadium is consistently almost filled to capacity and the fans seem reasonably interested. But the MLS games lack intensity or any sense of urgency; instead, they have the feeling of a friendly neighborhood match. Yallop takes a deep breath and says: "You're absolutely right!"

In Beckham's new world there are referees who call fouls when there is no foul because they don't know how tough the sport can really be. In Beckham's new world there is a championship series with a preliminary round of more than 30 games per team, at the end of which there is no clear winner. The champion only emerges in the playoffs, at which point it becomes irrelevant that Yallop's team may have won only three of the first 11 games in the opening round.

And Beckham's new world still isn't quite in synch with the old one. While the US national team plays in the South American championship, the league will continue at home, and in the fall Galaxy will find itself playing four games without Beckham when he plays for England.

But what happens when this European star realizes what kind of soccer galaxy he has ended up in? "Marketing isn't the issue on the pitch," says Yallop. "He doesn't want to fail because he has never failed in soccer."

Manager Alexi Lalas is convinced that people will soon start showing up at the stadium who "want to see Beckham and have no idea who Ronaldinho is." He says that he has a long list on his desk of celebrities eager to score tickets. "This stadium will be the place to be this summer," says Lalas. And with his list including Hollywood actors, major producers, rock stars, TV executives and Internet millionaires, the excitement could rival what happened with Cosmos in the 1970s.

Fittingly enough, the team has even installed a red carpet. For $50, the discriminating soccer fan can now drive up to the Home Depot Center and have his car valet-parked. The entrance resembles that of a luxury hotel, complete with a canopy and a staircase leading up to the stadium's VIP entrance. But at the top of that staircase everything is suddenly a lot less glamorous -- the VIP enclosure is nestled between a refreshment stand and the women's bathroom.